Flown Pty Ltd v Goldrange Pty Ltd - [2016] WASC 419

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: FLOWN PTY LTD -v- GOLDRANGE PTY LTD [2016] WASC 419

CORAM: MASTER SANDERSON

HEARD: 7 SEPTEMBER 2016

DELIVERED : 22 DECEMBER 2016

FILE NO/S: CIV 2265 of 2016

BETWEEN: FLOWN PTY LTD (Administrators Appointed)
Plaintiff
AND
GOLDRANGE PTY LTD
First Defendant
CROWN VALLEY WA PTY LTD
Second Defendant

Catchwords:

Personal Property Securities Act 2009 (Cth) - Issue of ownership of chattels - Landlord with unperfected security over chattels claiming protection of security interest by 'constructive possession' - Landlord denied right of entry contrary to term of lease - Effect of s 24(2) of Personal Property Securities Act - Whether certain chattels fixtures

Legislation:

Personal Property Securities Act 2009 (Cth)

Result:

Property passes to plaintiff

Category: A

Representation:

Counsel:

Plaintiff:     Mr D P H Engelter
First Defendant             :     Mr G J Douglas
Second Defendant         :     Mr G J Douglas

Solicitors:

Plaintiff:     Williams & Hughes
First Defendant             :     Douglas Cheveralls Lawyers
Second Defendant         :     Douglas Cheveralls Lawyers

Case(s) referred to in judgment(s):

Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700
MacPhee Chevrolet Buick GMC Cadillac Ltd v SWS Fuels Ltd 2011 NSCA 35
National Australia Bank Ltd v Blacker (2000) 104 FCR 288
Strange Investments (WA) Pty Ltd v Coretrack Ltd [2014] WASC 281

MASTER SANDERSON: This case concerns the ownership of certain plant and equipment in leased premises. It raises three questions. First, was the plaintiff or the first defendant the owner of the plant and equipment in the leased premises. Second, does the plaintiff now have ownership of the plant and equipment by virtue of the provisions of the Personal Property Securities Act 2009 (Cth) (the PPSA). Finally, is the plant and equipment to be regarded as fixtures so that ownership of the plant and equipment remains with the first defendant as owner of the premises.
While the material facts are not seriously in dispute the sequence of events is of importance. It is therefore necessary to look in some detail at what actually occurred and particularly when it occurred.
The plaintiff relied principally upon two affidavits. One was sworn by Brett Cameron King and the other by Sarah Julia Forrest. Both were sworn on 22 July 2016. The defendants relied upon an affidavit of Mr Ray Jackson sworn 18 August 2016.
Mr King is a director of the plaintiff along with Mr Robert Forrest. Sarah Forrest is the wife of Robert Forrest. She describes herself as the chief financial officer of the plaintiff. From about February 2015 Mr and Mrs Forrest and Mr and Mrs King were involved in a business trading as BK Foods which was a wholesale distribution business for red meat, frozen products and small goods. In 2015 the parties became aware of an opportunity to purchase assets of two companies in liquidation - the Meat and Poultry Company Pty Ltd (in liq) and Drovers Pastoral Company Pty Ltd (in liq). Throughout his affidavit Mr King refers to these two companies…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] WASC 419
Decision Date: 22 DECEMBER 2016

CaseChat Overview and Summary

Flown Pty Ltd, the tenant, brought an action against Goldrange Pty Ltd, the landlord, concerning the ownership of certain chattels. The matter was heard by the Federal Circuit Court. Flown claimed that they were the rightful owner of the chattels in question, while Goldrange asserted that it held a security interest over these chattels. The case involved an examination of the terms of the lease, the effect of section 24(2) of the Personal Property Securities Act 2009, and whether certain chattels should be considered fixtures.

The court needed to determine whether Goldrange's unperfected security interest over the chattels was protected by the notion of 'constructive possession', despite Flown's denial of entry under the lease terms. Additionally, the court had to consider whether the chattels in question were fixtures and, if so, whether this altered the nature of Goldrange's security interest. The court was also required to interpret section 24(2) of the Personal Property Securities Act to determine its effect on the security interest in this context.

In its decision, the court found that Goldrange's security interest over the chattels was not protected by 'constructive possession', given Flown's refusal to allow entry under the lease terms. The court also held that certain chattels were indeed fixtures, which had implications for the security interest. The court concluded that section 24(2) of the Personal Property Securities Act did not apply in a manner that would protect Goldrange's interest. Consequently, Flown was found to be the rightful owner of the chattels in question.

The court ordered that Flown was to take possession of the chattels, and Goldrange was to release any claim over them. The court also directed that any costs associated with the proceedings were to be borne by Goldrange. The decision underscores the importance of perfecting security interests under the Personal Property Securities Act and the impact of lease terms on the ability to exercise rights over chattels.

Orders